Vietnam’s North-South high speed railway can cost $32 billion less

China's Fuxing fast-speed train service between Beijing and Shanghai operates at 350 kilometers per hour. Photo by Reuters. Sketched by the Pan Pacific Agency.

HANOI, Jul 10, 2019, VN Express. Using different routes and speeds, two ministries have North-South high speed railway cost estimates that differ by a whopping $32 billion. The Ministry of Planning and Investment (MPI), using calculations of experts from the Netherlands and Germany, said that by optimizing the route and reducing the length of the railway, the railway will cost $26 billion. It would be much lower than the $58.7 billion estimated by the Ministry of Transport (MoT) earlier, reported the VN Express.

The train speed under the MPI’s calculations is 200 kilometers an hour, lower than the 350 kilometers proposed by the MoT.

Even a developed country like the Netherlands has decided to not upgrade its high-speed railway from 200 to 300 kilometers an hour because of high price tag and lack of corresponding benefits, the MPI said in a letter to Prime Minister Nguyen Xuan Phuc.

“A speed of 200 kilometers is appropriate as it will lower costs. Letting the train run 350 kilometers an hour only to carry passengers is redundant and wasteful,” the ministry said.

Travelling time between Hanoi and Ho Chi Minh City would be about eight hours at the speed of 200 kilometers an hour, and five or six hours at 320 kilometers per hour.

The MPI has also proposed that the new high-speed railway be constructed alongside the upgrade of the existing one which would be used for cargo transport.

The high-speed railway project should be constructed by local firms so that foreign firms won’t grab all the high value contracts, the ministry said. It also advised against using exclusive technology from foreign firms to avoid excessive dependency.

The MoT last year revived the north-south high-speed railway after it was rejected by the National Assembly in 2010 due to its $56-billion price tag, which was half of Vietnam’s GDP then. Experts had expressed concerns again over raising such huge sums of money.

Under the original plan, two sections – from Hanoi to the central town of Vinh and from the central town of Nha Trang to HCMC – was to be built first in 2020-2030 at a cost of $24 billion, with commercial operations likely to begin in 2032. All sections were expected to be completed and operational by 2040-2045.

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